Share swap rules pave way for M&A
11 August 2006
New regulations providing a framework for foreign investment in local companies via share swaps have been announced by the Ministry of Commerce, the Wall Street Journal reported. A notice on the ministry's web site Wednesday said the new rules take effect September 9 and aim to "promote and regulate foreign investment in China and maintain fair competition and economic security." In theory, the new rules would allow such transactions to be used for mergers and acquisitions. The Ministry of Commerce, the State-owned Assets Supervision and Administration Commission, the State Administration for Industry and Commerce and three other government agencies jointly developed the new rules. Foreign companies that want to undertake a share swap deal must be listed abroad and have had steady stock prices for a year.
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